On January 1, 2020, Sunland SA purchased the following two machines for use in its production process.

Machine A:		The cash price of this machine was R$50,000. Related expenditures included: sales tax R$2,600, shipping costs R$100, insurance during shipping R$80, installation and testing costs R$60, and R$150 of oil and lubricants to be used with the machinery during its first year of operations. Sunland estimates that the useful life of the machine is 5 years with a R$6,000 residual value remaining at the end of that time period. Assume that the straight-line method of depreciation is used.
Machine B:		The recorded cost of this machine was R$92,800. Sunland estimates that the useful life of the machine is 4 years with a R$4,400 residual value remaining at the end of that time period.

Prepare the following for Machine A. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

1.		The journal entry to record its purchase on January 1, 2020.
2.		The journal entry to record annual depreciation at December 31, 2020.

No.	Account Titles and Explanation	Debit	Credit
1.
2.

Calculate the amount of depreciation expense that Sunland should record for Machine B each year of its useful life under the following assumptions. (Round answers to 0 decimal places, e.g. 2,125. Round cost per unit to 2 decimal place, e.g. 1.25.)

(1)		Sunland uses the straight-line method of depreciation.
(2)		Sunland uses the declining-balance method. The rate used is twice the straight-line rate.
(3)		Sunland uses the units-of-activity method and estimates that the useful life of the machine is 135,500 units. Actual usage is as follows: 2020, 57,000 units; 2021, 37,500 units; 2022, 25,500 units; 2023, 15,500 units.

		2020		2021		2022		2023
Straight-line method		R$		R$		R$		R$
Declining-balance method		R$		R$		R$		R$
Units-of-activity method		R$		R$		R$		R$

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Which method used to calculate depreciation on Machine B reports the highest amount of depreciation expense :

In Year 1 (2020)		Declining-balance methodStraight-line methodUnits-of-activity methodDeclining-balance method and Straight-line methodDeclining-balance method and Units-of-activity methodStraight-line method and Units-of-activity methodAll three of the methods are equal
In Year 4 (2023)		Declining-balance methodStraight-line methodUnits-of-activity methodDeclining-balance method and Straight-line methodDeclining-balance method and Units-of-activity methodStraight-line method and Units-of-activity methodAll three of the methods are equal
Over the 4-year period		Declining-balance methodStraight-line methodUnits-of-activity methodDeclining-balance method and Straight-line methodDeclining-balance method and Units-of-activity methodStraight-line method and Units-of-activity methodAll three of the methods are equal

In Year 1 (2020)
In Year 4 (2023)
Over the 4-year period

Prepare the following for Machine A. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) 1. The journal entry to record its purchase on January 1, 2020. 2. The journal entry to record annual depreciation at December 31, 2020. No. Account Titles and Explanation Debit Credit 1. 2. Calculate the amount of depreciation expense that Sunland should record for Machine B each year of its useful life under the following assumptions. (Round answers to 0 decimal places, e.g. 2,125. Round cost per unit to 2 decimal place, e.g. 1.25.) (1) Sunland uses the straight-line method of depreciation. (2) Sunland uses the declining-balance method. The rate used is twice the straight-line rate. (3) Sunland uses the units-of-activity method and estimates that the useful life of the machine is 135,500 units. Actual usage is as follows: 2020,57,000 units; 2021, 37,500 units; 2022, 25,500 units; 2023, 15,500 units. 2020 2021 2022 Straight- line method R$ R$ R$ R$ Declining- balance method R$ R$ R$ R$ Units-of- activity method R$ R$ R$ R$ R$ Which method used to calculate depreciation on Machine B reports the highest amount of depreciation expense: In Year 1 (2020) In Year 4 (2023) Over the 4-year period